SEC continues its efforts to stop alleged crypto scam PlexCorps
The Commission has submitted a raft of documents in further support of its application for a preliminary injunction against the individuals behind PlexCorps.
The United States Securities and Exchange Commission (SEC) continues to advance its efforts to put an end to PlexCorps, aka PlexCoin.
On Friday, November 2, 2018, the Commission submitted a raft of documents in further support of its application for a preliminary injunction and other relief against defendants Dominic Lacroix and Sabrina Paradis-Royer at the New York Eastern District Court.
In the latest documents, seen by FinanceFeeds, the US regulator argues that developments since the filing of the application for a preliminary injunction have rendered even more conclusive the fraud case against the defendants. In particular:
court decisions and newly discovered facts further show that PlexCoin is a “security”;
additional evidence offers details of the defendants’ scheme to defraud thousands of victims in connection with the PlexCoin Initial Coin Offering (ICO) and to use ICO proceeds for their own personal expenditures, a scheme that continued well past the Court’s original asset freeze order in this matter.
The SEC notes that newly discovered evidence demonstrates that the defendants spent thousands of dollars on numerous Facebook advertisements that directly targeted and reached users in the United States and that promoted the PlexCoin ICO as an investment opportunity, and that purchasers viewed PlexCoin as an investment opportunity from which they hoped to profit based principally on the PlexCoin team’s efforts. The newly discovered evidence also provides additional detail as to how Lacroix and Paradis-Royer misappropriated a portion of the PlexCoin ICO funds for personal use.
Furthermore, the SEC says, the new evidence, including Lacroix’s own admissions and the declarations of his employees, further confirms that the defendants raised money in the PlexCoin ICO through a series of false representations, such as claims that the PlexCorps team consisted of more than forty individuals based in Singapore, when, in reality, PlexCorps and the ICO were run by Lacroix and a handful of his associates in Quebec, Canada.
The SEC argues that the defendants have not offered any evidence to rebut the voluminous record of the scheme to enrich themselves. Rather, they have simply countered that PlexCoin is a “currency” and therefore not a security, an argument that was rejected in the New York Eastern district in the context of digital assets similar to PlexCoin since the filing of the application for preliminary injunction.
Accordingly, the Commission seeks entry of a preliminary injunction against the defendants.
From August 2017 through the present, the defendants are alleged to have obtained $15 million from thousands of investors, including those throughout the United States and in the Eastern New York District, through materially false and misleading statements.